TMI Blog2012 (6) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... in earlier years i.e., assessment year 2005-06 and assessment year 2006-07 in which orders were made under section 143(3), no disallowance had been made. The assessment year 2007-08 was the first year in which disallowance was made this claim was not controverted by the ld. DR. Therefore, following the judgment of Hon’ble High Court in the case of Kotak Securities Ltd. ( 2008 (8) TMI 592 - ITAT MUMBAI) the disallowance of transaction charges in assessment year 2007-08 can not be up held. Thus order of CIT(A) deleting the addition on account of transaction charges is sustained. As regards depository charges, fees have been paid to depository for maintaining the accounts of the shares in Demat forms and for dematerializing of shares. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -left:0cm; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} table.MsoTableGrid {mso-style-name:"Table Grid"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-priority:59; mso-style-unhide:no; border:solid windowtext 1.0pt; mso-border-alt:solid windowtext .5pt; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-border-insideh:.5pt solid windowtext; mso-border-insidev:.5pt solid windowtext; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The AO also observed that the fees for technical services meant any consideration for rendering of any managerial, technical or consultancy services. The above charges had been paid for services involving specified knowledge, experience and skill in the field of share trading and, therefore, these were of the nature of technical services and partly of the nature of managerial services and, therefore, provisions of section 40(a)(ia) were applicable as the assessee was required to deduct tax at source. The AO therefore disallowed the claim under section 40(a)(ia). In appeal CIT(A) following the decision of the Mumbai Bench of Tribunal in case of Kotak Securities vs. Addl. CIT (25 SOT 440) held that stock exchanges do not provide any manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be deducted which was not done by the assessee. Accordingly the AO disallowed the claim under section 40(e)(ia). The Hon'ble High Court of Bombay in the case of Angel Capital Debit Market Ltd. (supra), have held that VSAT and leaseline charges paid by assessee to stock exchange were merely reimbursement charges paid/payable by the stock exchange to department of telecommunications and, therefore, these did not have any income element and accordingly tax was not required to be deducted. Following the said judgment, the order of CIT(A) deleting disallowance in respect of VSAT and leaseline charges is upheld. As regards transaction charges, Hon'ble High Court of Bombay in case of Kotak Securities Ltd. (supra) have held th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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